B.Sc.

in Computer Science and Engineering

Payment Switch Operation in Banking Sector: An overview of

Rupali Bank Ltd

Submitted by

Sanjida Akter Luva

2-16120122

Supervised by

Nusrat Jahan Mozumder (Deeptee)

Department of Computer Science and Engineering

Notre Dame University Bangladesh

Dhaka, Bangladesh

December 2019
 Candidate’s Declaration

This is to certify that the presented report of internship titled “Payment Switch Operation in

Banking Sector: An overview of Rupali Bank Ltd” of “Rupali Bank Ltd, Motijheel, Dhaka” is

uniquely prepared by me after the completion of three months’ work.

I also confirm that the report is only prepared for my academic requirement, not for any other

purpose. It might not be used with the interest of the opposite party of the corporation.

Sanjida Akter Luva

2-16120122

i
Commercial Certification

ii
 Academic Certification

This internship report titled, “Payment Switch Operation in Banking Sector: An

overview of Rupali Bank Ltd”, submitted by the student as mentioned below has been

accepted as satisfactory in partial fulfillment of the requirements for the degree B.Sc. in Com-

puter Science and Engineering in December 2019.

Student Name:

Sanjida Akter Luva

Supervisor:

Nusrat Jahan Mozumder (Deeptee)

Lecturer

Department of Computer Science and Engineering

Notre Dame University Bangladesh

iii
 Acknowledgement

First I would like to express my heartiest gratitude and gratefulness to The Almighty Allah

for His divine blessings which made it possible for me to complete this project successfully.I

am indebted to a number of people for their kind guidance, support, feedback, direction and

collaboration.

I would like to thank my supervisor & my teacher Nusrat Jahan Mozumder (Deeptee) whose

guidance & help was very much required prepare the Project successfully.

Then I would like to express my heartfelt gratitude to the Rupali Bank for giving me a chance to

complete my internship program at their head office Dilkusha branch, for allowing me to gather

information and helping me every possible way in preparing the internship report. My constant

thanks to go to the Switch team of ICT Operation Division for being patient and helping me

during my internship program I have learned many things from this reputed organization in a

short time.

Finally I would like to thank all teachers and staffs of Notre Dame University Bangladesh for

their kind assistance and support that provide me a perfect environment and good facility to

help me in accomplishment of my internship report.

iv
 Executive Summery

The goal of this project was to learn about Payment Switch Operation and its different type of

models in banking sector, an overview of Rupali Bank Limited.

A Payment Switch can be regarded as an independent entity that facilitates communication

among various providers.Payment Switch must be a high-performance device other than ex-

tremely flexible and usable.Payment Switch is a transaction processing program that receives

transaction requests from more than one interface (ATM, POS, payment gateway and much

more) and obtain authroisation for transaction from defined hosts ( Banking hosts for account

authorisation for debit cards or credit card hosts or prepaid card host). The payment gateway

talks directly with the switch to process payments.Here also discussed about some core model

of Payment Switch.

NPSB is related with Payment Switch operation.NPSB is a domestic ATM sharing network

governed by the Bangladesh Bank. The main objective of NPSB is to create a common electronic

platform for payments in Bangladesh. Through this network NPSB member bank’s customers

are to perform ATM transactions at other NPSB member banks’ ATM terminals using their

Debit/Credit/ATM cards.

Every progressive bank has its own IT framework and implementation strategy for reacting to

the changing global reality and thus preventing it from becoming a victim of the digital divide.

The approved IT policy has been updated to reflect the rapidly changing technologies within

the RBL to assist users of these facilities in ensuring that facilities are properly protected and

that clear IT protection targets are achieved.

v
Contents

Candidate’s Declaration i

Commercial Certification ii

Academic Certification iii

Acknowledgements iv

Executive Summery v

List of Figures viii

1 Introduction 1

1.1 Internship Project Chosen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 Project’s Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.3 Justifications of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.4 Scope of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2 Information of RBL 4

2.1 Overview of Rupali Bank Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2.2 Payment Switch Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.3 National Payment Switch of Bangladesh(NPSB) . . . . . . . . . . . . . . . . . . 7

2.4 Alternative Delivery Channel(ADC) . . . . . . . . . . . . . . . . . . . . . . . . . 8

2.5 ADC and its Broad Range of Product and Services . . . . . . . . . . . . . . . . . 8

2.6 Rupali Bank and Its ADC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2.7 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

2.8 Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

vi
CONTENTS CONTENTS

2.9 Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

3 Methodology 14

3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

3.2 Sources and methods of collecting Primary Data . . . . . . . . . . . . . . . . . . 14

3.3 Organizational Structure of IT Division . . . . . . . . . . . . . . . . . . . . . . . 15

4 ADC Technology and Management Policy 16

4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

4.2 RBL’s ADC Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

4.3 Card Management Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

4.4 Reconciliation and Settlement Process Management . . . . . . . . . . . . . . . . 17

4.5 Security Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4.6 Cash Movement Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4.7 Dispute Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4.8 Customer Support and Help Desk . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

4.9 Change Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5 Information and Communication Technology and My Work Description 20

5.1 The Work Process of ADC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

5.2 Card Personalization and Transaction Processing . . . . . . . . . . . . . . . . . . 21

6 Conclusions of the Study 24

6.1 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

6.2 Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

References 26

vii
List of Figures

2.1 Payment Switch Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2.2 Transaction flow and ratio (Courtesy by Bangladesh Bank) . . . . . . . . . . . . 7

2.3 Different Channel of ADC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2.4 working structure of ISO 8583 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

3.1 Organizational Structure of IT Division . . . . . . . . . . . . . . . . . . . . . . . 15

5.1 Simple ATM architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

5.2 Bank’s network of ATM and EFT switch . . . . . . . . . . . . . . . . . . . . . . . 21

5.3 EFT Switch and its simplified specification . . . . . . . . . . . . . . . . . . . . . 23

viii
Chapter 1

Introduction

1.1 Internship Project Chosen

This document describes all about full Payment Switch Operation and ADC(Alternate Delivery

Channel) in Banking system like:ATM,POS,MFS(Mobile Financial Service)management system

policy of Rupali Bank Ltd in IT Operation Division.As a final year student of computer science

and engineeringI have to submit a report as part of my study on the real life scenario of a

company or institution’s ICT operation in which my academic importance is really significant.In

other words, how can I use what I learned from my four years of study to integrate my analytical

ability into an organization’s aspect. As Bangladesh is emerging with its new generation of well-

equipped and ICT educated companies using ICT in a multi-faceted manner, it is easy to see

that the banking industry plays a pioneering role by using ICT in its sector.I chose Rupali Bank

as it is on its new era trip, i.e. ADC (Alternate Delivery Chanel) well-equipped core banking,

etc. I think this is the best way to learn and find out how a bank migrates and manages all

its previous activities in an ICT-based way. Initially, I had the opportunity to look inside each

project for a few days to get a general idea of what’s going on in the IT department of the bank.

In short the objective of my study and report can be summarized as following:

1.2 Project’s Objectives

1. To build an overall Idea about the payment switch operation and related term activities.

2. To get familiar with the tools and terminals i.e. ATM & POS terminals,MFS,ISO 8583,NPSB

1
1.3. Justifications of the Study Chapter 1. Introduction

etc.

3. To have clear understating about the Switching Software Interface, Dispute Management

System (DMS) and different Payment Gateway like VISA, MASTER, Q-Cash etc.

4. To know about the risk involved in ATM& POS transaction in respect of technology and

human threat.

1.3 Justifications of the Study

Rupali Bank is moving towards the modernisation of its ICT system from its traditional legacy

computerized system. The modern decentralized banking system is being converted to a cen-

tralized banking system, i.e. Intellect CBS.For instance, we can say (International Finance

Investment and Commerce Bank Limited) IFIC has launched a new ATM card product that

will at the same time work both as a Debit and Credit card. People now feel more comfortable

and easier to have their banking needs initiated by various automated terminals such as mobile

ATMs or POS instead of going to the bank or the counter service.So in this perspective, For a

CSE student who wants to develop his / her career in the banking industry in the future, the

ADC sector feels more promising and profitable.

From this viewpoint, though getting an internship with the ICT Operation Division of Rupali

Bank, I tried my best to get through the advantages and disadvantages of daily work or ADC

in other work as ATM and POS are well handled in both previous and new systems with a lot

of productivity by a group of highly qualified Rupali Bank men who inspired me to prepare my

report on this.

1.4 Scope of the Study

The subject matter analysis, i.e. The Payment Switch Operation and also ATM and POS

management system of Rupali Bank offers a multi-faceted study point or scope to gain ADC

network information. So I got the plan or research from my part of the study to be analyzed

with the following context.

1. The Card Management System or CMS.

2. Terminal Monitoring and On-line part of the ATM, POS or other terminals.

2
Chapter 1. Introduction 1.4. Scope of the Study

3. The Dispute Management System and its co-ordination with the bank’s CBS.

4. The Integration of Rupali Bank’s ADC Channel to the other Payment Gateway i.e. VISA,

Master and NPSB (National Payment Switch of Bangladesh),Q-Cash.

3
Chapter 2

Information of RBL

2.1 Overview of Rupali Bank Limited

Rupali Bank is one of the State owned Commercial banks in Bangladesh. Rupali Bank was

founded in 1972 (almost 45 years ago). It was constituted with the merger of 3 (three) erstwhile

commercial banks i.e. Muslim Commercial Bank Ltd., Australasia Bank Ltd. and Standard

Bank Ltd. operated in the then Pakistan on March 26, 1972 under the Bangladesh Banks (Na-

tionalization) Order 1972 ,with all their assets, benefits, rights, powers, authorities, privileges,

liabilities, borrowings and obligations. Rupali Bank worked as a nationalized commercial bank

till December 13, 1986. Rupali Bank Ltd. emerged as the largest Public Limited Banking

Company of the country on December 14, 1986. The Head Office of Rupali Bank is Rupali

Bhaban, 34 Dilkusha Commercial Area, Dhaka, Bangladesh[1].

Rupali Bank Limited, dealing with the needs of customers and competitive market demand,

encompasses IT-enabled services in order to respond to the rapidly evolving new and challenging

ICT climate in the banking sector.The Bank Management is very much keen on achieving the

overall organization goal by offering customers as well as other stakeholders a promising better

service through marching on with its ICT infrastructure. For this reason, the previous IT related

divisions of the bank were revamped and transformed from mid-2015 into two large IT-related

divisions operating in the ICT Operation Division & ICT System Division[1].

This report has dealt with The Payment Switch Operation and some of its core model and

Alternate Delivery Channel (ADC),its implication in a state owned bank “Rupali Bank Ltd.”

4
Chapter 2. Information of RBL 2.2. Payment Switch Operation

in the form of ATM and POS management system.

In its early stage, it performed totally in manual way as use of ICT was lacking in the era.

Later while information and communication technology stepped in the country’s walk way,

the bank quickly copped with it and converted its manual banking system to decentralized or

distributed banking.So in that period the bank was actually building its capacity to integrate all

its activities such as retail baking, trade finance etc. to the banking software system. Later with

the passes of time it converted its banking system using modern database like SQL server and

front end using dot net. Meanwhile most other private banks were using Centralized Banking

System(CBS). Being new starters they could easily framed all their banking works according to

the rules set in their CBS procured from renowned foreign companies. Therefore, this report

calls for knowing what a payment switch is and what RBL ADC is like.

2.2 Payment Switch Operation

A payment switch is a software that facilitates communication between multiple payment

providers to process payments in the most efficient way possible. Switches enable dynamic

transaction routing by giving merchants the ability to devise rules on an easy to use platform

where all payment information can be viewed and analyzed in one place. For instance, banks

sometimes refer to ATM switches when discussing the technology that allows different card

holders to withdraw money from various cash machines but payment switches are also widely

used in POS and CNP transactions. Payment Switch is often compared to a Payment Gate-

way – which offers a friendly front-end experience to sellers and shoppers who seek help with

payment management.

5
2.2. Payment Switch Operation Chapter 2. Information of RBL

Figure 2.1: Payment Switch Architecture

The payment switch performs the following core functions:

1. Manages direct integrations into the payment providers - the payment switch understands

the individual requirements of each payment provider (e.g APIs, file formats etc) that it

supports and defines a common interface for communication with that provider. It also

manages merchant’s configurations with a particular provider.

2. Manages 3D Secure MPIs (Merchant Plug-in)

3. Facilitates processing of real payments between these providers - It accepts request for

a payment, understands which providers it needs to process with, formats the message

for that provider and sends it to them, gets response, changes the response to a generic

format and send the response back to the caller.

But as we climb down the chain we can see different payment services, multiple components

and complex technical components and frameworks to support payment services.

Supporting Services: To support different payment services, additional services are required.

• Fraud Detection: Checking and identifying fraudulent transactions and raising RED flag

based on configured parameters.

• Device Management System: Integration and handling of both POS and ATMs. handling).

• Key Management: Key handling, key rotations, key sharing etc.

• Reconciliation and Settlement: Reconciliation and settlement is important functionality

6
Chapter 2. Information of RBL 2.3. National Payment Switch of Bangladesh(NPSB)

for both end-points of switch – Processor & Merchant

• Dynamic Currency Conversion: To support foreign currency transactions, currency con-

version based on exchange rates is a required feature.

2.3 National Payment Switch of Bangladesh(NPSB)

National Payment Switch Bangladesh (NPSB) is a domestic ATM sharing network governed

by the Bangladesh Bank. NPSB, which started its operation on December 27, 2012, is an

electronic platform introduced to attain interoperability among schedule banks for card-based

and online retail transactions. Through this network NPSB member bank’s customers are to

perform ATM transactions at other NPSB member banks’ ATM terminals using their Debit/-

Credit/ATM cards. All the switches of the planned banks must be connected to this switch so

that customers can access payment facilities from the terminals of any bank i.e. ATM or POS

terminals. The main objective of NPSB is to create a common electronic platform for payments

in Bangladesh. The system is meant to facilitate the expansion of the card-based payments

and promote e-commerce. At present, transactions among 48 banks are being routed through

the NPSB. At present, NPSB is processing interbank ATM, POS and internet banking fund

transfer transactions.

Why interoperable Payment Switch require?

Figure 2.2: Transaction flow and ratio (Courtesy by Bangladesh Bank)

7
2.4. Alternative Delivery Channel(ADC) Chapter 2. Information of RBL

2.4 Alternative Delivery Channel(ADC)

In the banking sector, Alternate Delivery Channels are channels and methods for provid-

ing banking services directly to the customers. Customers can perform banking transactions

through ATM / POS Terminals.ADCs are transformative in nature, accommodating the de-

mand for access to financial services “anytime, anywhere, anyhow”.New technologies increase

efficiency through automation, minimize operational costs and improve the quality of service

by increasing waiting times and delivering more convenient access and lower end-consumer

prices.ADC also related with Payment Switch Operation.

2.5 ADC and its Broad Range of Product and Services

ADC denotes a wider range of options that allow a customer to access financial services without

a branch visit. These include ATMs, POSs, Internet Banking, Company Banking, Extension /

Field Services such as Kiosk, Mobile Banking, and Digital or Mobile Wallets, more recently.

8
Chapter 2. Information of RBL 2.6. Rupali Bank and Its ADC

Figure 2.3: Different Channel of ADC

2.6 Rupali Bank and Its ADC

While Rupali Bank began the first bank to migrate the entire decentralized branch banking

system to the core banking system (CBS) a little later. The bank provided its customers with

the taste of ADC with the aid of an ATM card, i.e., even while operating with distributed

banking system. Ownership debit card.As the bank now operates under CBS, its ADC has

been established since to the need for a competitive market. The bank is offering now the

following ADC products:

1. ATM i.e. Proprietary Debit and Credit Card, Prepaid Card

2. POS

9
2.6. Rupali Bank and Its ADC Chapter 2. Information of RBL

3. Mobile Wallet (Rupali – Sure Cash)

Like another ADC operating financial service provider Ruapli Bank is using ADC related lo-

gistic without which no ADC can work. This includes EFT Switch, CMS, Card Production &

Personalization Machine, Payment Gateway or Payment Processor, Terminals like ATM, POS

etc. Here below some terms have been defined throughout this report.

ATM: An automated teller machine (ATM) is an electronic banking outlet, which allows cus-

tomers to complete basic transactions without the aid of a branch representative or teller.

Anyone with a credit card or debit card can access most ATMs[2].

POS: A point of sale terminal (POS terminal) is an electronic device used to process card

payments at retail locations. A POS terminal generally does the following[3]:

• Reads the information of a customer’s credit or debit card

• Checks if the funds in the bank account of the customer are appropriate

• Transfers the funds from the customer’s account to the seller’s account (or at least, ac-

counts for the transfer with the credit card network)

• Records the transaction and prints a receipt

Mobile Wallet: The mobile wallet, which is also called mWallet, digital wallet, or eWallet,

refers to a mobile technology that is used similarly to a real wallet. A virtual wallet that stores

payment card information on a mobile device. Mobile wallets provide a convenient way for a

user to make in-store payments and can be used in dealers listed with the service provider for

mobile wallets.

Q-Cash: Established in the year 2000, the first third party private payment processing firm

in Bangladesh. Q-Cash was launched by ITCL with only 5 banks (now 35+banks) of which a

respective bank is one of the sponsor bank and another playing the role of a settlement bank.

In this manner, after 14 year of operations, Q-Cash has now become a name where banks feel

proud to join which just not only adds value but also minimizes the cost of setting up a switching

system. Moreover, it facilitates all the financial institutions to connect with each other through

this common channel.

ISO 8583: ISO 8583 is an international standard for interchange messaging derived from a

financial transaction card. It is the standard for networks that exchange electronic transac-

10
Chapter 2. Information of RBL 2.6. Rupali Bank and Its ADC

tions initiated by cardholders using payment cards. Cardholder-originated transactions include

purchase, withdrawal, deposit, refund, reversal, balance inquiry, payments and inter-account

transfers. ISO 8583 also defines system-to-system messages for secure key exchanges, reconcil-

iation of totals, and other administrative purposes.In particular, both Master Card and Visa

networks base their transactions on the ISO 8583 standard, as well other institutions and net-

works.

Figure 2.4: working structure of ISO 8583

Issuer: Issuer or Issuing bank is essentially the bank that holds a customer’s account and issues

a card for the customer’s benefit.

Acquirer: Acquirer or Acquiring Bank is the bank acquiring or carrying out a payer’s activity.

In other words, the acquirer account is the institution from which the customers receive the

money or pay the merchant instead of the issuer.

On Us Transaction: When the issuer and acquirer is same in a transaction it is called on us

transaction. Here the customer carries out his/her banking operation within the bank’s own

network, i.e. the customer of a bank gets money from his / her own atm or swipes his / her

card in the issuer bank’s own POS. Customer went to RBL’s own banded ATMs in this regard

and did not complete his payment, so their account was wrongly debited.

Remote On Us Transaction: When a customer of a bank performs his / her transaction

settled by another bank, the transaction is known as a remote transaction on us by the issuer

bank. For example, the customer of X bank gets money from the atm of Y Bank and from the

point of view of X bank it is a remote transaction on us.

Off Us Transaction: When other bank’s customer performs his/her banking transaction in

our bank it is an off us transaction from other bank’s perspective. In the previous example

whatever is remote on us transaction to bank X , is an off us transaction to the bank Y.

11
2.7. Mission Chapter 2. Information of RBL

2.7 Mission

The Bank’s wide-ranging goal is to represent it in its brand slogan ” Assures better service.”

The ATM & POS management system has its own share of this mission statement as one of

the strategic business units.As ICT-Operations Division’s ADC section is dealing with non-

traditional product or service it has got to achieve its mission as to provide better service to

the present and potential customer in a way so that customers experience different innovative

and new ADC related product and service and can bank at ease with minimum effort and

expenses and gets the better service thereby.As a state, Rupali Bank owned is essentially not

profit-oriented, service-oriented bank. But from the point of service to be provided, the task

can be summarized as ”Value and satisfaction first, benefit is just a logical consequence”.

2.8 Vision

Continue to be the leading, responsible and environmentally friendly banking institution that

operates in such a way that fellow competitors and society are watching, noticing, admiring and

emulating RBL as a successful and model bank in the banking sector.

2.9 Objective

Rupali Bank, as it extends its mission and vision to each and every SBU (Strategic Business

Unit) to achieve the overall ICT Operations Division organizational goal while operating its

ADC, has achieved its individual goal.Therefore, to integrate with the Bank’s broad objective

ICT operations Division has established its own target, i.e. ”offering different ADC products and

services to present and potential customers in order to achieve maximum customer satisfaction,

thereby increasing the number of bank customers that will eventually add quality and quantity

benefit”.

Strength:

1. Rupali Bank being a state-owned bank has got an enormous size with a huge number of

branches and customers.

2. The bank’s branches are spread wide the country’s near and far location, even at some rural

remote locations where no other bank has intention to set up branches in consideration

12
Chapter 2. Information of RBL 2.9. Objective

of profitability.

3. The bank has well-formed capital structure energized and monitored by Government au-

thorities regularly.

Weakness:

1. Rupali Bank has started his activity long before the concept of ICT became in the field

of banking industry. So it always takes a huge time and a lot R&D before implementing

any software module in its activities as no ready-made cut throat software available in the

market fulfils its mode of business rules.

2. Till now the bank is having a remarkable number of employees who were employed when

no ICT knowledge available.

Threats:

1. Private Banks are very much keen on getting their staffs in all sector from state-owned

banks. like Rupali Bank. As in the industry, it has already been spread that Rupali

Bank is moving towards true online banking with well and distinguished designed ADC or

ATM and POS channel, there exists a threat these bank would try to get Rupali Bank’s

engineers who are young and have vast knowledge of implementing CBS and ADC.

2. The bank has not yet properly prepared and tested its BCP (Business continuity plan)

and DRP (Disaster Recovery Plan). As a result, there involves a huge risk of massive

channel failure.

13
Chapter 3

Methodology

3.1 Introduction

Data is collected through record keeping or pooling, observation or measuring. The integral

part was to identify and collect data; they are classified, analyzed, interpreted and presented in

a systematic manner. The nature of the report is qualitative and quantitative and the source

is primary and secondary. We must consult with various people, news, newspaper and other

sources to gain collect data.

3.2 Sources and methods of collecting Primary Data

For the purpose of preparing this report, I have carefully observed ICT operations department

of RBL and got information from the responsible officers at certain department. Sources of

data collection are as follows:

Primary Sources:

Personal Interview: I interviewed ICT operations Department officials especially those re-

lated to the ATM & POS management system in RBL.

Briefing Session: Assistant General Manager or their approved officials gave their respective

departments. Information gathered these sessions has been used in this report.

Secondary Sources: Secondary sources of data include:

• Ordinances of RBL.

14
Chapter 3. Methodology 3.3. Organizational Structure of IT Division

• Annual Reports of RBL.

• Others Materials of the Rupali Bank ltd.

• RBL website.

• General Information.

• Newspaper, journals, various write up on information Technology.

• Materials and documents of RBL

3.3 Organizational Structure of IT Division

Figure 3.1: Organizational Structure of IT Division

15
Chapter 4

ADC Technology and Management

Policy

4.1 Introduction

As user need and demand is rapidly getting updated with the changing environment of tech-

nology, the ADC is facing continuous pressure to cope with this technological change. While

previously the bank had to deal with its internal network of ADC now they are getting pushed

to comprise their ADC to different ADC of other institution as all the financial institution are

striving to be on a single platform. Hence, the ADC Technology and management is becoming

complicated day by day. This chapter therefore, for the very reason depicts the different tech-

nical aspect and management policy implemented by Rupali Bank Ltd. (RBL) to go on with

its ADC.

4.2 RBL’s ADC Policy

The bank as it is working with ATM and POS at this face, it has a full time and full winged

card department. The bank’s card department issues card, integrates all related activities to its

own EFT Switch and other banks’ switches. As well as the card department has to synchronize

its activity so that it can be well integrated with the NPSB (National Payment Switch of

Bangladesh).

Outsourcing Technological Need: The bank primarily has found it more cost effective to out-

16
Chapter 4. ADC Technology and Management Policy 4.3. Card Management Strategy

source the card personalization, production and CMS as well as the EFT Switch to run its ADC

business. The bank has signed an agreement with the Q-Cash consortium for this purpose. By

outsourcing its technological need the bank by all means can work as an intending client for

working with ADC.

MOU (memorandum of understanding) with different payment gateway: The bank for the

versatile and widely acceptance of its card to home and abroad can initiate MOU with different

international payment processor as it has done with Q-cash .i.e. VISA, Master etc. though the

bank doesn’t need it for use of its card in local territory as acceptance is made by another bank

through NPSB.

4.3 Card Management Strategy

Cards can essentially be perceived as both a domestic and an international passport. Domestic

cards are cards approved for payment in the territories of the country while accepting foreign

cards around the globe. Cards can be regarded in a different way as exclusive cards where the

card has only the logo of banks and is not a member of any international gateway such as VISA

or Master.Whereas cards having printed logo of such gateway can be viewed as VISA cards and

Master cards. Proprietary cards can be customized as per the security of the bank whereas

different standard of PCI-DSS has to be maintained in case of later i.e. EMV standard. The

bank as initially has launched proprietary cards is working under the country’s geographical

location. In future when the bank will issue international dual currency cards it will join those

merchants like VISA and Master etc.

4.4 Reconciliation and Settlement Process Management

As ADC in today’s environment facilitates a customer transacting from anywhere regardless

which bank’s terminal it is the settlement process needs to be centered somewhere within the

process. For settlement of transaction through ADC within the banks arena or between in-

ter branch a Feeding Branch has been declared to settle transaction occurs between branches.

Interbank transactions, where one bank’s customer makes transaction from other banks ter-

minals, are settled through a settlement bank. In case of Q-Cash consortium member banks

transactions are settled by the Trust Bank Ltd. Outside of Q-cash such transactions are settled

17
4.5. Security Policy Chapter 4. ADC Technology and Management Policy

by the Bangladesh Bank (NPSB) where all scheduled banks are maintaining their accounts

mandatorily.

4.5 Security Policy

In maintaining the ADC the bank has to assure high degree of security while data travels

through network both on-net and off-net. Any communication between different nodes of the

overall network is done through IP-SEC VPN data encryption. All the data travel through

physical nodes like terminals ATM or POS and Switch or CMS are maintained in ISO-8583

protocol and well protected algorithm. Physical security of Terminals like ATM and POS are

maintained by deploying full time security guards and by complying different policy adopted

by the Bangladesh Bank. For instance, recently all ATMs are kept under Close Circuit Camera

and PIN Shield and anti-Scheming devices.

4.6 Cash Movement Management

For cash loading in to different ATMs owned by the bank it keeps a well-defined account at the

central location i.e the feeding branch. Feeding Branch loads cash in ATMs within its territory

while remote ATMs are fed through regional feeding branch having their transaction maintained

in the feeding branch. The cash feeding process is made well learnt to the respective officers

through training in presence of proper security.

4.7 Dispute Management

Dispute is a common issue in card transactions when a cardholder did not receive money as

they demanded or received a partial sum in ATM terminals or were unable to pay any bill with

their card to a merchant POS, however their account was debited as they requested this event

is called a Debit Card Manner dispute.

The process of settlement of ADC transaction logically therefore is called DMS or Dispute

Management System. Rupali Bank as member of Q-Cash settles it dispute by raising the claim

of dispute from the customer to the QDMS Q-Cash Dispute Management and in case of NPSB

to the NPSB DMS. The bank having two different user interfaces for QDMS and NPSB DMS

raise a claim; observe its status then finally settles as per the result of this system.RBL resolve

18
Chapter 4. ADC Technology and Management Policy 4.8. Customer Support and Help Desk

all dispute transaction as National Payment Switch and/or other payment scheme’s Dispute

Management procedures and guidelines. After proper investigation, respective authority reverse

the transaction previously disputed through defined accounting guideline and the customer is

reimbursed soon.

4.8 Customer Support and Help Desk

A help desk or customer support center well equipped with required software and hardware

resources are set up to help the customer in card activation as well as for any card related

information and complain.

4.9 Change Management

ADC is required to be updated with the present market need. Changes are obvious to be

integrated within the channel. Before adopting a change request in the existing channel activity

an independent committee first review the required change, its effect in the existing channel then

an UAT is performed to measure the result of such change. Finally, if everything is complied, the

new version of channel management is deployed confirming proper version control management.

19
Chapter 5

Information and Communication

Technology and My Work
Description

5.1 The Work Process of ADC

Hence for the very reasons now let us have a glance how the ADC department works and

organizes its activity. Let us first take a simple architecture how the bank and EFT SWITCH

interacts. As in the diagram it is shown the host computer or the SWITCH resides at the

middle of the bank’s CBS and its terminals like ATM. That shows the fact that all transactions

are routed and processed through the EFT Switch and finally resides at the bank’s CBS.

20
Chapter 5. Information and Communication
5.2. Technology
Card Personalization
and My Work
and Transaction
Description Processing

Figure 5.1: Simple ATM architecture

Let us take a deep instilling in the following elaborated diagram. A bank with its internal

network is first connected through proper security channel to the EFT Switch. And all the

bank’s terminal like POS machines and ATM are connected to the EFT Switch.

Figure 5.2: Bank’s network of ATM and EFT switch

5.2 Card Personalization and Transaction Processing

Card personalization is a core model of the Payment Switch system. There is a Card Manage-

ment System (CMS) software which maintains the account of the card holders synchronizing

21
5.2. Card Personalization
Chapter 5. Information
and Transaction
and Communication
Processing Technology and My Work Description

with Rupali Banks Core Banking Software (CBS) and Vendor (ITCL) switching software (Q-

Cash) through the middle-ware which maintains it. . For clear understanding let us define the

work process in a number of steps like below:

Card Data: Each card regardless which bank issues it contains some data in it. Card data

may be kept either in magnetic stripe behind the card or in a chip fixed in the front part. A

bank may keep some special data as per its own policy but commonly The Card Number or

PAN (Primary Account No) is kept. The PAN is composed of some digital numerical character

where the BIN predominates all.

Card insertion or swiped in a terminal: When a card is inserted or swiped in a terminal

either in an ATM or POS the terminal first does read the information from the card and takes

the PAN information to the EFT Switch where the terminals first intercept. The online part

of the EFT Switch sends this information to its processing unit and looks for whether the BIN

came along with PAN belong to it or other banks or third party payment gateways. If the EFT

Switch finds that the BIN belongs to its owner bank than it pushes this PAN to its CMS. In

other cases, if the BIN not belongs to the owner bank it looks in its routing table to find where

to route this BIN whether to any specific banks EFT Switch or to other third party payment

processors EFT Switch like VISA or Master etc. If the BIN is unknown to the EFT Switch it

returns a reject message to the terminals from where the transaction was actually generated.

Verification of request and interaction with the UI: When the EFT Switch finds that

the BIN is valid and belongs to its host bank the EFT Switch instantly throws this information

to the CMS connected to the Switch The CMS then observes this complete PAN and loads the

cards PIN and other related information to its memory. The CMS automatically then prepare

a message asking for PIN and push this message to the UI (user interface) of the terminals

showing ‘Please insert your PIN’. After the card holder inserts the PIN the terminal carries

that information again to the EFT Switch and EFT Switch pushes this response to the CMS

for verification. If the CMS finds that the PIN received matches with its loaded information

from its database it than produces another message asking for amount of transaction to be made

and pushes it to the UI through the EFT Switch. The user then inserts the desired amount of

transaction and this subsequently reaches the CMS again. Now the CMS sends this transaction

request to the middleware that communicates with the Banks CBS. Rest of the process is easy

the CBS looks in to whether the account tagged with the given PIN no is allowed to make

22
Chapter 5. Information and Communication
5.2. Technology
Card Personalization
and My Work
and Transaction
Description Processing

such transaction in respect of fund sufficiency and accepts or rejects the transaction and pushes

back this information to the CMS. The CMS after having the clearance from CBS prepares

another message and asks the terminal to dispense money or accept the transaction and print

receipt of show successful message confirmation in the UI, in other cases the declining message.

Each bank configures its CMS according to its business policy i.e. how much money a user can

withdraw per day or how many times he or she can try for a PIN. Now if the EFT Switch finds

that the BIN is required to be routed to other EFT Switch rest of the transaction process is

performed by the respective side and end with the help of the initiating banks EFT Switch and

terminals.

Figure 5.3: EFT Switch and its simplified specification

SMS Alert: Each customer’s information is kept in the banks CBS. No sooner a successful

transaction is done an sms is sent instantly sent to the respective customer’s cell phone to inform

him that a transaction has been made using his or her card.

23
Chapter 6

Conclusions of the Study

6.1 Conclusion

After getting an opportunity to do the internship in this pioneer in this form Rupali Bank

Limited has been a great experience. It was a great honor for me to work in such a professional

company where everything is so organized and perfect. The corporate culture that I learned

from RBL, is a thing to be mentioned especially and adapting to it was a big challenge in such

an early stage of my career. The things I learnt from real time work experience for the first

time has indeed been a privilege. To work in such a big organization was a pressure itself and

adapting to this pressure was also a new experience. After completion of my work tenure as

an intern, I feel blessed to have learned so many things in such a short span of time. New

learning’s and helpful attitude of colleagues is a thing to be remembered for a long time. I

certainly believe this experience of working in RBL will help me to be a successful professional

in life and also work as an added advantage for the years to come. Thanks to RBL for giving me

a head start in my career. Finally, thanks Notre Dame University Bangladesh and the Faculty

of Computer Science and Engineering (CSE) for conducting this industrial training program.

6.2 Recommendation

While traveling through the study it has been observed a bank’s ADC is becoming complicated

and sophisticated day by day. Rupali Bank is entering its new era of ADC from converting

its process flow and from Co-Branded Switching to Own Branded Switching. Therefore, it is

required to draw a conclusion with some recommendation that may help the bank upholding

24
Chapter 6. Conclusions of the Study 6.2. Recommendation

its ADC image.

1. The Bank should time to time upgrade its existing IT-Security Policy to assure better

service to its customers.

2. The bank should deploy different physical security to prevent card counterfeiting and card

cloning. For this purpose the bank should comply and assure all the compliance guided

and asked by Bangladesh Bank i.e. using PIN Shield and anti-scheming devices.

3. The bank now is supplying only magnetic proprietary cards to its customers. But in

order to best secure customers’ card data the bank needs to implement chip based card

in proprietary cards.

4. As through the NPSB acquiring banks that have huge network can acquire all banks

transaction and earn a lot Rupali Bank should expand its channel of distribution by

deploying more and more ATM and POS. This will increase the bank’s income in ADC.

5. With a view to reduce operational cost and cost of instrument the bank can deploy new

innovation in its branches like Bank POS that will facilitate the bank to serve its customer

over the counter with a minimum effort of cashier and without cost for instrument like

cheque etc. as well as help the bank earn through acquiring other banks’ transaction in

its cash counter.

6. The bank, as the technology is getting tougher day by day, must review its whole process

of ADC time to time and upgrade accordingly.

25
References

[1] Annual report of rbl. Technical report, Rupali Bank, 2017- 2018.

[2] Automated teller machine (atm) definition. https://www.investopedia.com/terms/

a/atm.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186. (Accessed on

12/16/2019).

[3] What is a point of sale terminal (pos terminal)? - definition from techopedia. https://www.

techopedia.com/definition/26649/point-of-sale-terminal-pos-terminal. (Ac-

cessed on 12/16/2019).

26